[01.
05] LEAGUE OF CITIES OF THE PHILIPPINES v COMELEC Revenue Allotment (IRA) because more cities will share the same amount of
GR No. 176951, 177499, 178056 | April 12, 2011 | Justice Bersamin |
Freya Patron
GR No. 176951
PETITIONERS: League of Cities of the Philippines, City of Calbayog
RESPONDENTS: COMELEC, Municipality of Baybay, Province of Leyte,
Municipality of Bogo, Province of Cebu, Municipality of Catbalogan, Province of
Western Samar, Municipality of Tandag, Province of Surigao del Sur, Municipality
of Borongan, Province of Eastern Samar and Municipality of Tayabas, Province
of Quezon
GR No. 177499
PETITIONERS: League of Cities of the Philippines, City of Calbayog
RESPONDENT: COMELEC, Municipality of Lamitan, Province of Basilan;
Municipality of Tabuk, Province of Kalinga; Municipality of Bayugan, Province of
Agusan del Sur; Municipality of Batac, Province of Ilocos Norte; Municipality of
Mati, Province of Davao Oriental; and Municipality of Guihulngan, Province of
Negros Oriental
GR No. 178056
PETITIONERS: League of Cities of the Philippines, City of Calbayog and Jerry
Trenas in his personal capacity as taxpayer
RESPONDENTS: COMELEC, Municipality of Cabdbaran, Province of Agusan
del Norte; Municipality of Carcar, Province of Cebu; Municipality of El Salvador,
Province of Misamis Oriental; Municipality of Naga, Cabu; and Department of
Budget and Management
TOPIC: Municipal Corporations – Creation and Alteration of LGUs
CASE SUMMARY: In the 11th Congress, 57 bills seeking the conversion of
municipalities into component cities were filed before the House of
Representatives. However, Congress did not act on 24/57 municipalities. In the
12th Congress, RA 9009 was enacted revising the LGC by increasing the income
requirement to qualify for conversion into a city from P20M annual income to
P100M locally generated income. In the 13th Congress, 16/24 municipalities filed
their individual cityhood bills. Each cityhood bill contained a common provision
exempting the particular municipality from the P100M income requirement
imposed by RA 9009. These cityhood bills lapsed into law on various dates after
Pres. Arroyo failed to sign them. Petitioners filed to declare the Cityhood Laws
unconstitutional for violation of Sec. 10, Art. X of the Constitution and for violation
of the equal protection clause. They also pointed that the wholesale conversion
of municipalities into cities will reduce the share of existing cities in the Internal
internal revenue set aside for all cities under Sec. 285 LGC.
On Feb. 15, 2011, the SC reversed its own decision for the 4th time, declaring the
Cityhood Laws as constitutional. This case upheld its ruling with finality that the
Cityhood Laws are constitutional, stating that they should not ever lose sight of
the fact that the 16 cities covered by the Cityhood Laws not only had conversion
bills pending during the 11th Congress, but have also complied with the
requirements of the LGC prescribed prior to its amendment by RA No. 9009.
Congress undeniably gave these cities all the considerations that justice and fair
play demanded. Hence, the Court should do no less by stamping its imprimatur
to the clear and unmistakable legislative intent and by duly recognizing the
certain collective wisdom of Congress. The 16 municipalities were finally
converted into component cities.
DOCTRINE: There should also be no question that the local government units
covered by the Cityhood Laws belong to a class of their own. They have proven
themselves viable and capable to become component cities of their respective
provinces. They are and have been centers of trade and commerce, points of
convergence of transportation, rich havens of agricultural, mineral, and other
natural resources, and flourishing tourism spots. In his speech delivered on the
floor of the Senate to sponsor House Joint Resolution No. 1, Senator Lim
recognized such unique traits.
FACTS:
 This is an Ad Cautelam Motion for Reconsideration filed by petitioners vis-à-
vis the Resolution promulgated on Feb. 15, 2011. They anchor their Ad
Cautelam MR upon the ground that the Court could no longer modify, alter or
amend its judgment declaring the Cityhood Laws unconstitutional due to the
judgment having long become final and executory. They submit that the
Cityhood Laws violated Sec. 6 and Sec. 10 of Art. X of the Constitution and
the Equal Protection Clause.
ISSUE and RULING: AD CAUTELAM MR DENIED FOR LACK OF MERIT.
WON the Cityhood Laws violate Sec. 6 and Sec. 10, Art. X of the
Constitution, the Equal Protection Clause and the right of LGUs to a just
share in the national taxes. (NO)
 Congress clearly intended that the local government units covered by the
Cityhood Laws be exempted from the coverage of RA 9009. The
apprehensions of the then Senate President with respect to the considerable
disparity between the income requirement of P20 million under the LGC prior
to its amendment, and the P100 million under the amendment introduced by
RA 9009 were definitively articulated in his interpellation of Senator Pimentel
 during the deliberations on Senate Bill No. 2157. The then Senate President
was cognizant of the fact that there were municipalities that then had
pending conversion bills during the 11th Congress prior to the adoption of
Senate Bill No. 2157 as RA 9009, including the municipalities covered by the
Cityhood Laws. It is worthy of mention that the pertinent deliberations on
Senate Bill No. 2157 occurred on October 5, 2000 while the 11th Congress
was in session, and the conversion bills were then pending in the Senate.
Thus, the responses of Senator Pimentel made it obvious that RA 9009
would not apply to the conversion bills then pending deliberation in the
Senate during the 11th Congress.
 RA 9009 took effect on June 30, 2001 when the 12th Congress was incipient.
Because of the clear legislative intent to exempt the municipalities covered
by the conversion bills pending during the 11th Congress, the House of
Representatives adopted Joint Resolution No. 29, entitled Joint Resolution to
Exempt Certain Municipalities Embodied in Bills Filed in Congress before
June 30, 2001 from the coverage of RA 9009. However, the Senate failed to
act on Joint Resolution No. 29. Even so, the House of Representatives
readopted Joint Resolution No. 29 as Joint Resolution No. 1 during the 12th
Congress, and forwarded Joint Resolution No. 1 to the Senate for approval.
Again, the Senate failed to approve Joint Resolution No. 1.
 The conversion bills of the respondents were individually filed in the House of
Representatives, and were all unanimously and favorably voted upon by the
Members of the House of Representatives. The bills, when forwarded to the
Senate, were likewise unanimously approved by the Senate. The acts of
both Chambers of Congress show that the exemption clauses ultimately
incorporated in the Cityhood Laws are but the express articulations of the
clear legislative intent to exempt the respondents, without exception, from
the coverage of RA 9009. Thereby, RA 9009 and the LGC were amended,
not by repeal, but by way of express exemptions being embodied in the
exemption clauses.
 The petitioners further contend that the new income requirement of P100
million from locally generated sources is not arbitrary because it is not
difficult to comply with; that there are several municipalities that have already
complied with the requirement and have, in fact, been converted into cities,
such as Sta. Rosa in Laguna, Navotas and San Juan in Metro Manila,
Dasmariñas in Cavite and Biñan in Laguna and that several other
municipalities have supposedly reached the income of P100 million from
locally generated sources, such as Bauan in Batangas, Mabalacat in
Pampanga, and Bacoor in Cavite.  COURT DISAGREES.
 As indicated in the Resolution of February 15, 2011, 59 existing cities had
failed as of 2006 to post an average annual income of P100M based on the
figures contained in the certification dated December 5, 2008 by the Bureau
of Local Government. The large number of existing cities, virtually 50% of
them, still unable to comply with the P100M threshold income five years after
RA 9009 took effect renders it fallacious and probably unwarranted for the
petitioners to claim that the P100M income requirement is not difficult to
comply with.
 The Court takes note of the fact that the municipalities cited by the
petitioners as having generated the threshold income of P100M from local
sources, including those already converted into cities, are either in Metro
Manila or in provinces close to Metro Manila. In comparison, the
municipalities covered by the Cityhood Laws are spread out in the different
provinces of the Philippines, including the Cordillera and Mindanao regions,
and are considerably very distant from Metro Manila. This reality
underscores the danger the enactment of R.A. No. 9009 sought to prevent,
i.e., that “the metropolis-located local governments would have more priority
in terms of funding because they would have more qualifications to become
a city compared to the far-flung areas in Mindanao or in the Cordilleras”
actually resulting from the abrupt increase in the income requirement.
 There should also be no question that the local government units covered by
the Cityhood Laws belong to a class of their own. They have proven
themselves viable and capable to become component cities of their
respective provinces. They are and have been centers of trade and
commerce, points of convergence of transportation, rich havens of
agricultural, mineral, and other natural resources, and flourishing tourism
spots. In his speech delivered on the floor of the Senate to sponsor House
Joint Resolution No. 1, Senator Lim recognized such unique traits.
 The petitioners’ contention that the Cityhood Laws violated their right to a just
share in the national taxes is not acceptable. The share of local government
units is a matter of percentage under Section 285 of the LGC, not a specific
amount. Specifically, the share of the cities is 23%, determined on the basis
of population (50%), land area (25%), and equal sharing (25%). This share is
also dependent on the number of existing cities, such that when the number
of cities increases, then more will divide and share the allocation for cities.
o The allocation by the National Government is not a constant, and can
either increase or decrease. With every newly converted city becoming
entitled to share the allocation for cities, the percentage of IRA
entitlement of each city will decrease, although the actual amount
received may be more than that received in the preceding year. That is
a necessary consequence of Section 285 and Section 286 of the LGC.
 The Cityhood Laws were not violative of the Constitution and the LGC. The
respondents are thus also entitled to their just share in the IRA allocation for
cities. They have demonstrated their viability as component cities of their
respective provinces and are developing continuously, albeit slowly, because
 they had previously to share the IRA with about 1,500 municipalities. With
their conversion into component cities, they will have to share with only
around 120 cities.
 Local government units do not subsist only on locally generated income, but
also depend on the IRA to support their development. They can spur their
own developments and thereby realize their great potential of encouraging
trade and commerce in the far-flung regions of the country. Yet their potential
will effectively be stunted if those already earning more will still receive a
bigger share from the national coffers, and if commercial activity will be more
or less concentrated only in and near Metro Manila.
DISSENTING OPINION - Justice Carpio
 In sustaining the constitutionality of the 16 Cityhood Laws, the majority ruled
in the Resolution of 15 February 2011 that “in effect, the Cityhood Laws
amended RA 9009 through the exemption clauses found therein. Since the
Cityhood Laws explicitly exempted the concerned municipalities from the
amendatory RA 9009, such Cityhood Laws are, therefore, also amendments
to the LGC itself.
 In the Resolution denying petitioner’s motion for reconsideration, the majority
stated that “RA 9009, and, by necessity, the LGC, were amended, x x x by
way of the express exemptions embodied in the exemption clauses.” This is
egregious error. Nowhere in the plain language of the Cityhood Laws can
this interpretation be discerned. Neither the title nor the body of the Cityhood
Laws sustains such conclusion. Simply put, there is absolutely nothing in the
Cityhood Laws to support the majority decision that the Cityhood Laws
further amended the Local Government Code, which exclusively embodies
the essential requirements for the creation of cities, including the conversion
of a municipality into a city.
 An “amendment” refers to a change or modification to a previously adopted
law. An amendatory law merely modifies a specific provision or provisions of
a previously adopted law. Indisputably, an amendatory law becomes an
integral part of the law it seeks to amend.
 The Constitution is clear. The creation of local government units must follow
the criteria established in the Local Government Code itself and not in any
other law. There is only one Local Government Code. To avoid
discrimination and ensure uniformity and equality, the Constitution expressly
requires Congress to stipulate in the Local Government Code itself all the
criteria necessary for the creation of a city, including the conversion of a
municipality into a city. Congress cannot write such criteria in any other law,
like the Cityhood Laws.
 In stating that there is no evidence to support the increased income
requirement, the majority is requiring the Legislature, the sole law-making
body under the Constitution, to provide evidence justifying the economic
rationale, like inflation rates, for the increase in income requirement. The
Legislature, in enacting RA No. 9009, is not required by the Constitution to
show the courts data like inflation figures to support the increased income
requirement. Besides, even assuming the inflation rate is zero, this Court
cannot invalidate the increase in income requirement on such ground. A zero
inflation rate does not bar the Legislature from increasing the income
requirement to convert a municipality into a city, or increasing taxes or tax
rates, or increasing capital requirements for businesses.
 The Court should not venture into areas of analyses obviously beyond its
competence. As long as the increased income requirement is not impossible
to comply, such increase is a policy determination involving the wisdom of
the law, which exclusively lies within the province of the Legislature. When
the Legislature enacts laws increasing taxes, tax rates, or capital
requirements for businesses, the Court cannot refuse to apply such laws on
the ground that there is no economic justification for such increases.
Economic, political or social justifications for the enactment of laws go into
the wisdom of the law, outside the purview of judicial review. This Court
cannot refuse to apply the law unless the law violates a specific provision of
the Constitution. There is plainly nothing unconstitutional in increasing the
income requirement from P20 million to P100 million because such increase
does not violate any express or implied provision of the Constitution.
 The majority’s conclusion that the Legislature increased the income
requirement from P20 million to P100 million “simply to make it difficult for
the municipalities to become component cities” is not only unfair to the
Legislature, it is also grossly erroneous. Contrary to the majority’s baseless
conclusion, the increased income requirement of P100 million is not at all
difficult to comply. As pointed out by petitioner, the cities of San Juan and
Navotas, which met the P100 million income requirement, were created at
the same time as the enactment of the Cityhood Laws by the same 13th
Congress.
 Prior to this, the City of Sta. Rosa, which also met the P100M income
requirement, was created through RA 9264. Subsequently, the cities of
Dasmariñas in Cavite and Biñan in Laguna were created in full compliance
with the P100 million income criterion. Further disproving the majority’s
erroneous conclusion, an additional 21 municipalities have satisfied the
P100M income requirement for the creation of cities. Accordingly, petitioner
League of Cities has endorsed the cityhood application of these 21
municipalities.
 Right after the enactment of RA 9009, Congress passed laws converting
municipalities into cities using the new P100M income requirement.
Subsequently, Congress enacted the 16 Cityhood Laws using the old P20M
 income requirement. Thereafter, Congress again passed laws converting
additional municipalities into cities using the P100M income requirement.
The 16 Cityhood Laws stick out like a sore thumb, starkly showing an
obvious violation of the equal protection clause. The Cityhood Laws create
distinctly privileged cities with only P20M annual income, discriminating
against cities with P100M annual income created before and after the
enactment of the Cityhood Laws. This kind of discrimination is precisely what
Section 10, Article X of the Constitution seeks to prohibit when it commands
that “no x x x city x x x shall be created x x x except in accordance with the
criteria established in the local government code.”
 The majority harp on the fact that 59 existing cities had failed as of 2006 to
post an average annual income of P100 million. Suffice it to state that there
is no Constitutional or statutory requirement for the 59 existing cities to
comply with the P100M income requirement. Obviously, these cities were
already cities prior to the amendment of the Local Government Code
providing for the increased income requirement of P100M. In other words, at
the time of their creation, these cities have complied with the criteria
prescribed under the old Local Government Code for the creation of cities,
and thus are not required to comply with the P100M income requirement of
the prevailing Local Government Code. It is utterly misplaced and grossly
erroneous to cite the “non-compliance” by the 59 existing cities with the
increased income requirement of P100M to conclude that the P100M income
requirement is arbitrary and difficult to comply.
 There must be strict compliance with the express command of the
Constitution that “no city x x x shall be created x x x except in accordance
with the criteria established in the local government code.” Substantial
compliance is insufficient because it will discriminate against all other cities
that were created before and after the enactment of the Cityhood Laws in
strict compliance with the criteria in the LGC as amended by RA 9009. The
conversion of municipalities into new cities means an increase in the Internal
Revenue Allotment of the former municipalities and a corresponding
decrease in the Internal Revenue Allotment of all other existing cities. There
must be strict, not only substantial, compliance with the constitutional
requirement because the economic lifeline of existing cities may be seriously
affected. Thus, the invocation of “substantial compliance” with constitutional
requirements is clearly misplaced in this case.

DISPOSITIVE: WHEREFORE, the Ad Cautelam Motion for Reconsideration

(of the Decision dated 15 February 2011) is denied with finality.